Yes — on a clear morning it's the single best sunrise in Portugal. You're at 1,818 m above a sea of cloud, with Pico Ruivo lit pink behind you. But it only works in clear conditions; in cloud you see nothing. Check the live mountain webcam before you set the alarm.
Pico do Arieiro is Madeira's third-highest peak and the only summit reachable by paved road, which makes it the default sunrise spot. From the car park it's a 200 m walk to the viewpoint — no hiking required.
Drive up the ER202 from Funchal — 45 minutes in the dark, leaving roughly 90 minutes before sunrise. The road has hairpins but is in good condition. Bring a fleece even in summer: temperatures up there can be 10 °C colder than at sea level.
If you continue from Arieiro along the PR1 trail to Pico Ruivo, you get a 7 km hike across the spine of the island — one of Europe's great ridge walks. It's marked moderate, takes 3–4 hours one-way, and a few sections are vertigo-exposed.